UPDATE / 3.45pm: Trade Me shares (NZX:TME) were down 3.53% to $3.83 in the immediate wake of today's earnings announcement before recoverinig to $3.89, or 2.2% down.

Profit rose 8.4% to $75.6 million in the 12 months ended June 30, the Wellington-based company says. Sales increased 13.8% to $142 million. Analysts had expected profit of $70 million on revenue of $146 million.

On a conference call, CEO Jon Macdonald said costs, up 35% against the prior year, would rise faster than revenue but that the company's gross profit margin – once 80% – would "stay safely above 60%".

Mr Macdonald told NBR the increase in costs was due to an extra 60 staff being added over the year, plus the governance and other costs involved with being a public company.

Trade Me, the online auction site spun off by Fairfax Media in December, beat its prospectus forecast for earnings on classified sales growth and the roll out of new smart phone applications.

Profit rose 8.4% to $75.6 million in the 12 months ended June 30, the Wellington-based company says. Sales increased 13.8% to $142 million. Analysts had expected profit of $70 million on revenue of $146 million.

Earnings before interest, tax, depreciation and amortisation increased 11.3% to a record $110.4 million, beating its prospectus forecast by 4.7%.

A "strong performance" of revenue from the sale of general items through the website was led by an 8% increase in trading via mobile phones after the development of smartphone applications across the company's individual businesses.